RBA says 'Merry Christmas", but banks say 'Humbug!"

So it looks like the RBA has done the nice thing and dropped the rate again, in what seemingly is a wonderful boost for the average mortgage owner's hip pocket, but wait.....there's a catch. The banks, well, the four majors, have not moved yet, and, as has been the practice over the last year or so, they are waiting until 'the board meets' and as a result, they will still pocket an extra few million just for their troubles. PS. please CBA, just flick us 1 mil of this, I'd be very thankful. In fact, CBA, just pay off my mortgage and I'll never say another bad thing about you ever again...promise.

Anyway, so the reality is, this early 'Christmas present' that is spoken about, in fact, will not be a Christmas present at all for many of us, as once the respective boards meet, it's then at least another week or two before it comes into effect, and the next time your will actually see your interest repayments go down will be at the end of January (all assuming the banks do lower their rates).

In other financial news, I am almost at the stage of switching to UBank. I am not overly happy with the ever growing gap between what I am being offered from CBA and UBank is starting to look tasty. The only problem is, I have absolutely NO IDEA, whether they'll lend for another investment property. This is a bad thing and a major one as to the decision of why I am holding off the switch. I think maybe once everything has been consolidated and I'm left with a tiny mortgage, it may be time to do it, but unfortunately it looks like a distance away before this comes to fruition. 

Oh well, CBA it is. 

The frustrations of getting a settlement through

As I sit here, I am beginning to feel a bit of rage; actually, quite a bit of RAGE! You see, we have been trying to settle on a new home, a home for my family. From the get go, we have had delays. Now, after a few more weeks, there is ANOTHER LENGTHY DELAY. The matter should have settled on Monday, but now we have the seller taking their time to sign transfer papers and here we are, trying to take possession so that we can move in before our second little protein bundle enters our lives in about 6 weeks or so. It seems none of this matters to anyone really, not our broker, not the bank, not our solicitors, not their solicitors, not the seller. I'm probably just venting a bit, but we are powerless to push anything through. I do get a bit peeved (I could have used a much worse adverbial phrase there) though, when we hear statements such as 'They forgot to post it...' and 'He forgot to send it Express...' and 'He got his brother to post it...', which by the way, must be utter bullshit, since it's now been almost a week for this envelope to travel approximately 120km. So, I think Melinda hit the nail on the head when she suddenly realised they are probably stalling for the financial year; it all makes sense. Doesn't make our predicament any better though...NOT HAPPY JAN!

Hopefully next week I'll have some more positive news.

Rant over.

Finally, finance has been approved!

I won't bore you too much with the details, but organising the finance for this purchase has been a mini nightmare, with one stupid unnecessary delay after another. After a lot of stuffing about, finance was approved today, about a week and a half late.

I pondered on this scenario for a while and I now ask myself are banks THAT BUSY right now that it takes them over 4 weeks to approve a loan to a relatively low risk client? We have NEVER missed a payment, not even close, we have cross-collateralised way below 80% LVR, and the house we're buying a is a solid place which we will be living in. Considering the above, perhaps maybe I should apply to become a bank lender, as I can not see how ANY approval would take any more than 30 minutes. Banks, surely, SURELY, would have a lending criteria tick-and-flick, finance approved or valuations, or not. Come to think of it, a large chunk of the issue was getting to the valuer stage, which is bizarre! I'll role play a lending officer for a moment:

1. Receive loan application

2. Observe on the application that the mortgagee wants to cross collateralise with a list of properties: Order valuations.

3. Continue process of organising paperwork and making an ad-hoc decision based on paper estimates.

4. Receive valuations, approve loan.

5. Go and eat KFC.

So why does this take 4 WEEKS PEOPLE! 4 WEEKS? A load of crap...

Property 6 is now approved!!!

What a glorious day! Our latest acquisition of KFC, no, I mean investment property, was approved by the bank today. I have to say the frustration I felt yesterday was quite warranted, the bank needed a second extension to the finance approval date! My poor broker was on the receiving end of my rant, so Chris, sorry, but I was severely pissed off.

So, my wife and I now have six properties. For the time being, this house will be our primary place of residence, for at least one year, so we get a tax benefit when it comes time to sell (i.e. no capital gains tax), which as I'm sure most of you are aware, can go on for 6 years, even with rental coming in after you leave. It's one of those lovely little loopholes I hope Mr KRudd doesn't close in the near future, as it saves us a few thousand when it comes time to sell, whenever that will be.

It's quite a good place, compared to where we have lived in the last few years. There is a problem with flood, but the 2009 Ingham floods were huge and it would only come up to my chest standing in the bottom level. Luckily, it's built in a way that if a flood does come, it would just require a hose down, no carpet and plaster, but tiles and visiboard are the option. Actually, it goes like this. In 1966, there was a very big flood, bigger than the one we had earlier this year. Then nothing until 1976, when a large body of water came and stuffed everything up again. Then in the early 90's there was a mini version of what Ingham just experienced, up until this year. So, odds are, that there may be a "flood event" within the next 10 years, but luckily Suncorp does that insurance.

There will be a bit of work to do...paint here and there, fix this, clean that, put in this and that...etc. etc. but nothing too drastic...

Something you may not have known about our banks...

The other month, my bank manager got a shock when I refinanced and took all my business away from the money hungry, paperwork losing, miss-communicating bank. Unfortunately I ended up with another money hungry, paperwork losing, miss-communicating bank, which begs the question, are all middle managers and loan account personnel in major banks idiots?

While I let you ponder over that question, I did bring up this topic for a reason. The banker called me, that's right, personally called me and asked why I hadn't spoken to him. So I proceeded to tell him, using very simple language just to make sure he understood, that my broker found a better deal. What happened next surprised me. He said, "You know I could have matched that rate?"

This blew me away. Is it possible that I can haggle and bargain my way to better deals with the banks? Is it possible that all those published rates are a crock of shit and I am actually able to "shop around" until I get to the lowest rate?

He actually informed me that yes, he is able to offer better rates to keep my business and to continue to use the services of his money hungry, paperwork losing, miss-communicating bank (lets call itmhplmcb for short).

Next time it comes time to refinance, I will put this to the test with my new mhplmcb. Maybe you should try it too...:)